Federal Payroll, Gift, and Prepaid Card Developments: FDIC Deposit Insurance Eligibility and the Credit Card Act of 2009
Sarah Jane Hughes
Indiana University Bloomington School of Law
The Business Lawyer, Vol. 65, p. 261, November 2009
Indiana Legal Studies Research Paper No. 155
Prepaid and other stored-value products have grown into major tools for making retail payments and payments of wages to employees. This article discusses two major developments in federal law that pertain to stored-value products - the November 2008 - revision of primary guidance from the Federal Deposit Insurance Corporation on the scope of eligibility of payroll cards for deposit insurance, and Congress’ May, 2009 enactment of the CARD Act, which takes effect on February 22, 2010. The CARD Act is the first effort by the federal government to regulate gift cards. It established federal standards relating to subjects on which state laws varied widely, and preempts state laws. In addition, the CARD Act gave to the Board of Governors of the Federal Reserve System rule making authority over gift cards, general-use prepaid cards, and electronic gift certificates. The Act also grants to the Department of the Treasury authority to adopt comprehensive regulations concerning the issuance, sale, redemption and international transport of stored-value cards. This authority reflects growing concerns that money launderers are increasingly able to move funds through stored-value products.
Number of Pages in PDF File: 11
Keywords: prepaid cards , Card Act of 2009, payroll cards, deposit insurance, Electronic Fund Transfer ActAccepted Paper Series
Date posted: March 3, 2010 ; Last revised: July 10, 2013
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