In the U.S. Senate, Sen. David Perdue, R-Georgia, has filed a similar proposal to override the prepaid card rule. His bill has picked up the support of U.S. Sens. John McCain and Ted Cruz along with Sen. Johnny Isakson, a fellow Georgia Republican.
Perdue received $15,000 in campaign contributions from Total System Service’s political action committee in 2014, when he first won election to the Senate. Between 2013 and 2014, Perdue received another $7,000 from Woods, according to federal election records.
Perdue’s office declined to comment. When the CFPB proposed delaying the rule on March 9, Perdue said “the CFPB continues to be a rogue agency.”
“From its initial stages, this rule was shortsighted and so sweeping that it would have stifled innovation in a growing marketplace millions of consumers rely on. Ultimately, the CFPB should scrap this rule altogether and I will continue working to protect consumers,” Perdue said.
On Tuesday, the progressive advocacy group Allied Progress sued the CFPB in Washington for the agency’s correspondence with Perdue and the 11 cosponsors of his bill.
Karl Frisch, executive director of Allied Progress, said his group filed the suit “to compel the release of any correspondence that might shed additional light on the shadowy efforts being undertaken to help this predatory company by lobbyists, other senators, and the company itself.”
Hoping to head off Perdue’s bill and the similar legislation in the House, Democratic attorneys general from 18 states and the District of Columbia wrote congressional leaders on April 5 to tout the need for protections around prepaid cards. The states, led by District of Columbia Attorney General Karl Racine, described the Senate and House bills as part of a “misplaced effort to undo the CFPB’s regulations.”
The state attorneys general said the CFPB’s rule “provides commonsense protections to some of the most vulnerable consumers—those who do not have access to bank accounts.” They added: “The final rule also combats abuses that arise when prepaid cards are used by outliers in the prepaid card marketplace, such as payday lenders. The overdraft limits are largely supported by the prepaid card industry with only one major opponent, Netspend, which is seeking to preserve the roughly $50 million in overdraft and other fees it charges to struggling families each year.”
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