Combination ID/Prepaid Card: Set to Debut in Oakland

Prepaid is one of the most flexible forms of payment available – and its latest incarnation, in Oakland, California, is a city-issued ID card for undocumented residents who are often financially vulnerable and under- or unbanked. It is the first city in the U.S. to offer municipal ID cards with prepaid features.

The card, dubbed the Oakland City ID Prepaid MasterCard  is a joint venture between SF Global, MasterCard, and University National Bank. The card was designed to provide identification (particularly so users can identify themselves to legal authorities) as well as provide entrance into affordable financial services. Card users can take advantage of direct deposit, as well as shop online with the card.

According to the Oakland Tribune, the card alone will cost $15. The prepaid features cost $2.99 per month. Other fees include a $1.50 ATM withdrawal fee, a 75-cent fee on purchases and a $1.75 fee for calling customer service. It will cost $2.95 to load money onto the card.

The applications for the program are now being accepted by the city and the first cards expect to be issued by March 15th. The city expects to issue 6,000 cards this year.

A similar card is slated to debut in Richmond, Calif., and apparently, Los Angeles is also considering the idea. What do you think of this sort of opportunity for the prepaid industry? This is a huge development for the prepaid industry because it is a direct link between a person’s identity and spending –increasing security for unbanked finances.

Where will prepaid head next? Find out at the Prepaid Expo this March. For more information about the Expo, click here.





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No More Overdraft Fees for UTB Prepaid Customers

According to the Center for Responsible Lending, U.S. Households spend more on overdraft fees than on fresh veggies. Whether financial reform will change that remains to be seen.







On Friday, the $566 million-asset Urban Trust Bank (UTB) of Lake Mary, FL has stopped charging overdraft fees on prepaid cards. This came in response to consumer advocates who claimed the card offered overdraft protection for a fee of 15 cents for every $1 in negative balance, a rate that exceeded the interest-rate caps in several states.

The prepaid industry is getting scrutinized more and more about overdraft protection, regulation, as well as the fees – as we saw last week with the prepaid reforms from Attorney General Pam Bondi in Florida. In March at the Prepaid Expo, we will have a panel discussion on overdraft protection with a Netspend executive.

See the full list of speakers and to learn more about the Prepaid Expo click here.

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Prepaid Card Reforms: A Focus on UDAAP Risks

The Attorney General of Florida, Pam Bondi, recently announced settlements with five of the largest prepaid companies operating in the state. The settlements follow an investigation that the companies misled consumers on fees, as well as claims that the prepaid cards would improve their credit histories.

According to a statement from Bondi, “The reforms we are requiring will protect consumers by providing them with the information they need in order to make sound financial decisions, and they establish standard business practices among Florida’s largest prepaid debit card companies.” The settlement also includes a payment of $115,000 to the Central Florida Chapter of Junior Achievement.

While this news is not as brutal as the announcements of settlements over the summer, the legal community is bracing for more such news. With interpretation of UDAAP-related statutes often open-ended and murky, now is the time to protect your firm from risk and compliance issues coming up in 2013.

At Prepaid Expo this March, you’ll hear from Martin Bishop, Chair of Consumer Financial Services Practice and Vice Chair of Litigation Department at Foley & Lardner LLP. In this interactive UDAAP-focused session, you’ll dive into analysis of the statute, as well as tackle hypothetical situations to diagnose your readiness to handle compliance.

What do you think this settlement means for the prepaid industry as a whole? Is this a blip on the radar – or do companies need to join together as an industry to clarify these regulatory mandates?

Read the full article here.  




 ABOUT THE AUTHOR

Ryan Geswell is a New Media Analyst in the Finance Division at IIR USA with a background in Marketing and Media. He can be reached at rgeswell@iirusa.com.

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nFinanse releases new reloadable prepaid debit card

nFinanse has released a new reloadable prepaid debit card called nFinanSe Discover® Network Reloadable Prepaid Card which offers new services that make the upkeep of the prepaid card low. The card has low fees, text message notifications of transactions and balances, and free customer service. The card is available at Winn Dixie and Dollar General stores across the United States. For more, read here.

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Wal-Mart to Cash Economic Stimulus Checks for Free

Wal-Mart, the world's largest retailer, is allowing customers to cash their economic stimulus checks at their stores or load them onto the company's Wal-Mart Money Card prepaid card, without charging a fee or requiring a purchase, as reported by the Associated Press and published on BusinessWeek.com. Additionally, the company's Sam's Club warehouse stores will also cash the checks at no charge.

The economic stimulus packages are expected to reach 130 million households across the United States.

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