Federal Preemption
Issue
The need for national standards (resting upon a preemption for federally chartered institutions) for issuers and users of prepaid card products.
NBPCA Position
The NBPCA supports the doctrine of preemption for federally chartered institutions as well as other legal and regulatory efforts to encourage reasonable uniform treatment of prepaid card programs across all states.
Explanation
Issuers offers prepaid card products on a multi-state, and, in may cases, nationwide basis. The proliferation of state laws and regulations affecting prepaid card products has caused significant confusion in the industry and, because these laws and regulations are not being enacted in a concerted manner, their provisions often conflict with one another. These inconsistencies make adherence all of the applicable laws, rules and regulations difficult, costly, and, at times, impossible. Variations in required state and local disclosures and compliance requirements negatively impact the ability of prepaid card issuers to offer their products in certain states. The cost of products may be higher to the extent that multiple compliance requirements must be met. These additional costs will be borne by the consumer.
In light of the recent proliferation of state laws and regulations, the NBPCA believes in the necessity for greater consistency among existing laws, rules, and regulations, as well as the need for predictable and consistent interpretation of these laws. The NBPCA supports the doctrine of preemption for federally chartered institutions as well as other legal and regulatory efforts to encourage reasonable uniform treatment of prepaid card programs across all states.
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