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October 12, 2016



Our credit union sells AMEX prepaid gift cards to our members but we do not monitor the use of the card or reload once purchased. These cards are "redeemable upon presentation at multiple, unaffiliated merchants for goods and services." However, the rule seems to dictate application to prepaid ACCOUNTS vs a prepaid gift card. Do you read this rule to apply to this type of product?


I commented too quickly ... the flow chart yielded an exclusion to this product in
12 CFR 1005.20(a)(3)and(b). This section defines General-use prepaid card-

“General-use prepaid card” means a card, code, or other device that is:

(i) Issued on a prepaid basis primarily for personal, family, or household purposes to a consumer in a specified amount, whether or not that amount may be increased or reloaded, in exchange for payment; and

(ii) Redeemable upon presentation at multiple, unaffiliated merchants for goods or services, or usable at automated teller machines.

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