Wednesday, November 19, 2008

FDIC: Prepaid cards qualify for deposit insurance


People who have their payroll deposits, government benefit checks and other payments loaded onto prepaid cards may take comfort in a recent ruling by the Federal Deposit Insurance Corp.
Amounts stored on prepaid or
stored value cards may be covered under FDIC insurance for up to $250,000 per account, the FDIC ruled in a legal opinion issued Nov. 13.
The ruling came after a coalition of consumer groups appealed to FDIC Chairman Sheila Bair in September to take steps to prevent consumers from losing money stored on prepaid cards or gift cards if an issuer (such as a retail store) or a bank holding the funds goes out of business.
The FDIC ruled on only one part of the request -- the issue dealing with banks that hold funds stored on prepaid cards.

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