(CBS 5) – The nation’s consumer financial watchdog is calling for new protections for people who use prepaid debit cards.
At a hearing in North Carolina Tuesday, intended to start the process of writing rules to govern the rapidly expanding industry, Consumer Financial Protection Board Director Richard Cordray warned about the high fees that catch many consumers by surprise.
“If a company charges a fee for withdrawing money or checking a balance, or calling customer service, consumers should know about it,” Cordray said.
Cordray and other consumer advocates at Wednesday’s hearing warned that many cards offer few, if any, of the protections offered by traditional debit cards.
The market for prepaid debit cards is rapidly expanding. The business is expected to grow 40% this year, and many big banks including JP Morgan Chase and Wells Fargo are now offering the reloadable cards.
A number of websites including Nerdwallet offer comparisons of cards fees and features.
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