|FOR IMMEDIATE RELEASEJune 27, 2012||
On June 26th, the Black Economic Council, the Latino Business Chamber of Greater Los Angeles and the National Asian American Coalition released their public comments before the Consumer Financial Protection Bureau (CFPB) on prepaid cards. In summary, they stated that prepaid cards, if lightly but effectively regulated, could become the overwhelming financial instrument used by the vast majority of children, young adults and possibly among all underserved Americans.
The three minority business groups recommend, for example, light but simple, understandable regulations that would maximize the number of competing financial and non-financial institutions. They estimate that this could result in a $500 billion or more business within five years.
The groups also recommend the avoidance of problems inherent in credit cards and checking accounts by having just one simple but understating basic fee. This would also eliminate the need for comprehensive and expensive regulatory enforcement that often discourages competition.
Mia Martinez, chief deputy for the DC bank regulatory operations said, “The movement to prepaid cards could be as revolutionary as moving from landlines to smartphones. To ensure that it is the financial instrument of choice for the unbanked, underbanked and other underserved communities, we urge, to the degree possible, just one simple basic fee.
“We predicted if this is accomplished, prepaid cards could within less than five years be a highly profitable $500 billion a year business for both regulated and unregulated financial institutions. Most significantly, it could become an almost universal financial instrument for children, college students and underserved communities.