Oct. 23 — The Consumer Financial Protection Bureau (CFPB) is prepared “to use all appropriate tools” at its disposal to provide relief to RushCard customers who have been unable to access funds in their prepaid accounts for more than a week, Director Richard Cordray said in a statement.
In an Oct. 23 statement, Cordray said he has personally told UniRush CEO Rick Savard to take immediate action to fix problems its prepaid RushCard's customers are having accessing their accounts. The company has said technical problems are to blame for the customer access problem, which began Oct. 12.
“We have stressed that RushCard and its relevant business partners must ensure that no other consumers will be denied access to their funds. Further, we indicated that the CFPB is prepared to use all appropriate tools at our disposal to help ensure that consumers obtain the relief that they deserve,” Cordray said.
The CFPB is also discussing the situation with the Office of the Comptroller of the Currency (OCC) and the Federal Trade Commission (FTC) “to ensure a comprehensive response that addresses the situation quickly and holds accountable all of the parties involved to make consumers whole,” he said.
The CFPB declined to elaborate on what actions it might take. National Consumer Law Center associate director Lauren Saunders told Bloomberg BNA in an Oct. 23 e-mail that the bureau has authority to take enforcement action to address “unfair, deceptive or abusive practices,” and potentially for electronic fund transfer and funds availability regulations.
RushCard has said that customers had trouble accessing their accounts and direct deposits to the cards were returned, due to technical problems the company encountered when accounts were being transferred to a new platform.
A company spokeswoman was not immediately available for comment, but Savard told Bloomberg BNA in an Oct. 22 statement that some customers were still having problems (205 BBD 205, 10/23/15).
Some customers have said they faced late fees paying bills because of the problem. Cordray has told the company to promptly address the “cascading financial effects” of consumers not having access to their funds, according to the CFPB statement.
The card issuer, MetaBank, told Bloomberg BNA Oct. 22 that it and RushCard have tried to help customers facing late fees by overnighting money to them. RushCard also said in its Oct. 22 statement it is waiving its fees for the next four months to help with any losses customers may have faced.
“Very soon, RushCard will be making a significant announcement on how we plan to make this right with our customers who were severely inconvenienced and in some cases suffered hardships,” Savard said Oct. 22. “We have worked extremely hard in the past few years to build a product that is safe, secure and cost-effective for our customers. We are going to do everything we can for our customers and for the communities in which they live to restore their trust and faith in us.”
Saunders said, “We are encouraged by the serious attention that the CFPB is giving to address the situation and ensure that consumers are made whole.” Spokesmen for the FTC and OCC declined comment.
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