U.S. Sens. Mark R. Warner and Tim Kaine (both D-VA) joined a letter sent to the Consumer Financial Protection Bureau (CFPB) urging the agency to strengthen financial protections for a particularly vulnerable population: men and women seeking to reenter society after leaving prison.
Upon release, many prison banking services turn over any money saved while serving time in the form of a prepaid card, or “prison release card,” which are largely unregulated and often carry exorbitant fees. Former inmates are a population uniquely vulnerable to predatory behavior and financial abuse, and issuers of prepaid cards are not currently required to provide the same level of consumer information and disclosure required of most other gift cards and credit cards.
In 2014, CFPB released a study of prepaid account agreements and proposed federal consumer protections to ensure most prepaid consumers would be provided with the same protections or disclosures as traditional bank accounts. However, only five of the cards, or 1.5 percent of the agreements, included in CFPB’s study were prepaid prison release cards. Today, Sens. Warner and Kaine urged the CFPB to reexamine prison prepaid agreements and include this vulnerable population in the agency’s rulemaking to protect against predatory behavior in the prepaid market.
“As the Bureau moves forward with finalizing a proposed rule to strengthen protections for prepaid products, we urge you to take a second look at the impact of prepaid cards in the unique prison context. Prison release cards are a critical tool for people leaving prisons to transfer their earned wages and/or commissary account balances to a prepaid card. Any reductions to the wages and account balances of formerly incarcerated people could harm their ability to successfully reenter society,” wrote the Senators. “Today, some firms charge high fees on prison prepaid cards that create significant barriers to reentry for formerly incarcerated people. Most corrections agencies that report using prepaid cards also report that fees are imposed on cardholders, including unusual fees such as weekly maintenance fees.”
Sens. Warner and Kaine were joined in sending the letter by Sens. Cory Booker (D-NJ), Sherrod Brown (D-OH), Dick Durbin (D-IL), Patrick Leahy (D-VT), Joe Manchin (D-WV), Robert Menendez (D-NJ), Richard Blumenthal (D-CT), Benjamin Cardin (D-MD), Bernard Sanders (I-VT), Al Franken (D-MN), Ron Wyden (D-OR), Kirsten Gillibrand (D-NY), Jeffrey Merkley (D-OR), Edward Markey (D-MA), Michael Bennet (D-CO), and Elizabeth Warren (D-MA).
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