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Thousands Voice Concern about CFPB Proposed Rule

Mar 24, 2015

In letter to CFPB, NetSpend joins cardholders in urging the bureau to reconsider harmful restrictions impacting millions of underbanked and unbanked Americans

AUSTIN, Texas, March 24, 2015 — Yesterday, the 90-day comment period for the Consumer Financial Protection Bureau’s (CFPB) proposed rule on prepaid accounts ended. The controversial rule, unveiled in November, received considerable attention from those who would be the most impacted if enacted in its current form. During the comment period, thousands of prepaid cardholders and consumers, including NetSpend customers, raised their voices in opposition to the harmful impact and restrictions the proposed rule would have on their ability to choose products and services that meet their unique financial needs. Joining those voices, NetSpend, a TSYS Company (NYSE: TSS), sent the CFPB a letter urging the bureau to reconsider the proposed rule.

In its letter, NetSpend stated the current proposed rule would "negatively impact consumers by limiting their ability to obtain funds when they are most needed. The proposal includes complex, onerous, costly and difficult-to-understand requirements for prepaid card products that include treating overdraft as a line of credit." NetSpend believes that the proposal's overly prescriptive and complex rules for overdraft services would make offering such services for consumers' short-term liquidity needs difficult, and could potentially eliminate an opt-in service cardholders may choose today that is available to consumers who have access to more traditional banking services.

According to the FDIC, more than a quarter of households (28 percent), either do not have a bank account or use alternative financial sources to their bank accounts. Leading reasons for avoiding banks are insufficient income and account fees that are too high or unpredictable. Households most likely to be unbanked include minority, lower-income and younger people.

Household incomes have also become ever more volatile. The FDIC finds more than 30 percent of Americans reported unpredictable incomes due to irregular work schedules, joblessness or seasonal work — making it even more difficult to maintain a traditional bank account.

Throughout the comment period, NetSpend cardholders have stated unequivocally that the proposed rules would limit their options to access short-term liquidity needs forcing them to seek more expensive and less efficient alternatives, a decision that could significantly impact those most in need.

During a November CFPB hearing in Wilmington, Delaware, Shalynn Hill, a NetSpend customer, publicly voiced her concerns about the rule and the benefit of her prepaid card.

"Life happens and no, I don’t use it every month, but some months two things may happen in one day and I may need the overdraft. Limiting too much is not realistic, because things happen," Hill told the CFPB.

Since the proposed rule was unveiled in November, Americans from across the country have expressed anxiety around how they would manage daily, weekly, and monthly spending needs if the CFPB were to proceed with greatly limiting, if not eliminating, the availability of overdraft protection from prepaid card products. From concerns about ability to pay bills to paying for gas and groceries, thousands of Americans urged the CFPB to reconsider its position and the impact it would have on their lives.

"Many take for granted the ability to open a checking account or get a credit card. The truth is there are people who do not qualify or cannot afford the services of traditional banks. Americans, no matter their financial circumstance, deserve choice. Just because an individual does not have significant capital doesn't mean they aren’t savvy enough to make smart decisions," said Chuck Harris, president of NetSpend. "Prepaid products like the ones offered by NetSpend are not only consumer-friendly, but have protections that ensure cardholders are empowered to make the choice that is best for them.We proactively built in safeguards in NetSpend's overdraft service that are meant to help consumers preserve their money while exercising flexibility. Safeguards include a $10 buffer, a 24-hour grace period, fee caps that limit costs and cooling-off periods that limit excessive use."

The CFPB has not indicated when they will issue the final rule.

To receive a copy of NetSpend's letter to the CFPB please send a request to To see comments go to

About TSYS
At TSYS® (NYSE: TSS), we believe payments should revolve around people, not the other way around. We call this belief People-Centered Payments®. By putting people at the center of every decision we make, TSYS supports financial institutions, businesses and governments in more than 80 countries. Through NetSpend®, A TSYS Company, we empower consumers with the convenience, security, and freedom to be self-banked. TSYS offers issuer services and merchant payment acceptance for credit, debit, prepaid, healthcare and business solutions.

TSYS' headquarters are located in Columbus, Ga., U.S.A., with local offices spread across the Americas, EMEA and Asia-Pacific. TSYS is a member of The Civic 50 and has been named one of the 2015 World's Most Ethical Companies by Ethisphere magazine. TSYS routinely posts all important information on its website. For more, please visit us at

About NetSpend
NetSpend is the prepaid provider of choice to self-banked consumers and the brands that serve them. With a mission to empower consumers with the convenience, security and freedom to be self-banked, NetSpend's products have helped over 10 million consumers spend, budget and pay bills since 1999. Consumers can reload and find NetSpend Prepaid Cards at convenient locations nationwide through NetSpend's extensive network of 130,000 reload points and more than 85,000 distributing locations and employers, including check cashers, convenience stores, grocers, pharmacies, insurance providers and tax preparers. Headquartered in Austin, Texas, NetSpend is a wholly owned subsidiary of TSYS (NYSE: TSS). For more information, please visit, or follow NetSpend on Twitter at or on Facebook at

Cyle Mims
TSYS Media Relations