Prepaid cards are shaping up to be big business. According to the Consumer Financial Protection Bureau, a 2009 FDIC study found that nearly 10 percent of households use the cards, while the Mercator Advisory Group estimated growth to be 42 percent per year from 2010 to 2014.
As one of the more noteworthy cards on the market, the Bluebird prepaid card is likely helping fuel that growth. The card was introduced by American Express and Walmart last year and was expected to make prepaid cards more accessible and appealing to a wider consumer base.
"When we launched Bluebird last October, we were focused on serving the tens of millions of Americans who are not well served by the traditional financial services industry," said Dan Schulman, group president of Enterprise Growth at American Express, in a press statement.
However, at least one banking group says the Bluebird card is looking more like a checking account than a prepaid card and should be regulated as such.
Bluebird prepaid cards now offer FDIC insuranceCamden Fine, President and CEO of Independent Community Bankers of America, sent a letter in April 2013 stating Bluebird prepaid cards should be regulated as a banking product. His correspondence -- addressed to the CFPB, the FDIC and the Office of the Comptroller of the Currency -- appeared to be a response to a recent announcement that money loaded on Bluebird prepaid cards was now protected by FDIC insurance. Fine states it is just the latest addition to the cards that makes them look and act more like checking accounts than prepaid cards. In his letter, he says Bluebird includes many features associated with traditional checking accounts:
- Check-writing privileges
- ATM withdrawals
- Direct deposit