It’s A Whole New Card Game: New Federal Regulation of Debit, Prepaid and Gift Cards Discussion Questions April 23, 2010

2 Are the following a “gift card,” “general-use prepaid card” or neither for purposes of 12 CFR § ? Reloadable prepaid card marketed to give as a gift Reloadable prepaid card marketed for teen allowance Corporate travel advance card Employer issued payroll card State unemployment benefits card Retail rebate award card Network branded mall gift card Gift card given in exchange for returned merchandise It’s A Whole New Card Game: Discussion Question # 1

3 Pine Tree National Bank wants to issue a card which qualifies for a § (b)(2) exclusion as not marketed as a gift card. Which of the following are permissible graphic designs for the card: A pine tree A pine tree with a star on the top A pine tree with star, lights and ornaments A pine tree with star, lights and ornaments along with the words “This is not a gift card.” It’s A Whole New Card Game: Discussion Question # 2

4 Which of the following are considered gift cards for purposes of 12 CFR § ? A card good for free admission to an amusement park A card good for free admission and $25 dollars worth of concessions at an amusement park A card good for $25 towards admission and concessions an amusement park A card good for 25% off any purchase A card good for $10 off a $40 purchase A card good for $25 worth of mobile internet access It’s A Whole New Card Game: Discussion Question # 3

5 National retailer offers $5 back with a certain purchase. When triggered, a bar code is printed on customer’s receipt which can be redeemed for $5 in a future transaction. Under Reg. E., the funds must remain available for use for what period of time? Five years Five years if appropriate disclosures are made; otherwise indefinitely Until date disclosed by the retailer at time of purchase Reg. E does not apply It’s A Whole New Card Game: Discussion Question # 4

6 It’s A Whole New Card Game: Discussion Question # 4a

7 Retailer allows customers to purchase “on- line gift card”. Redemption code is ed to recipient and can be redeemed online. Under Reg. E., the funds must remain available for use for what period of time? Five years Five years if appropriate disclosures are made; otherwise indefinitely Until date disclosed by the retailer at time of purchase Reg. E does not apply It’s A Whole New Card Game: Discussion Question # 5

8 Retailer wishes to offer $25 gift card with $250 purchase. Card will have no fees but funds expire on Dec. 31, Which of the following is permissible: Issue retailer’s standard green gift card along with card carrier that states funds expire Dec. 31, 2010 Issue retailer’s standard green gift card with sticker on card that says funds expire Dec. 31, 2010 Issue special blue gift card; sticker on card that says funds expire Dec. 31, 2010; card carrier that provides toll-free number Issue special blue gift card; print expiration date on front of card and toll-free number on back of card Issue special blue gift card; print “Reward Card” and expiration date on front and print toll-free number on back It’s A Whole New Card Game: Discussion Question # 6

9 Bank issues network-branded non-reloadable gift cards. Funds expire 5 years after issued. The network requires that cards be issued with an expiration date for security purposes. Issuer has procedures in place to provide consumer with reasonable opportunity to purchase card with at least 5 years before expiration. Which of the following meets the expiration date disclosure requirements of Reg. E? Card expiration date on front; toll-free number and web site on back Card expiration date on front; “Funds expire 5 years from date of card issuance,” toll-free number and web site on back Card expiration date, “Funds may expire later.” on front; toll-free number and web site on back Card expiration date, “Funds may expire later. Contact Issuer for replacement card.” on front; toll-free number and web site on back It’s A Whole New Card Game: Discussion Question # 7

10 Bank issues network branded non-reloadable gift cards with certain usage fees. Which of the following meets the fee disclosure requirements of Reg. E? List of type, amount and conditions of each fee on back of card. Card sold in sealed envelope. List of type, amount and conditions of each fee on back of card. Card sold in carrier with back of card exposed. List of type, amount and conditions of each fee, toll-free number and website on back of card. Card sold in carrier with back of card exposed. Statement that fee information available via toll-free number and website on packaging and back of card. List of type, amount and conditions of each fee on packaging. Statement that fee information available via toll-free number and website on back of card. It’s A Whole New Card Game: Discussion Question # 8

11 Acme issues a non-reloadable prepaid gift card with the following fees: $1/month account fee $1 per ATM withdrawal $2 fee in months with no activity; waived first 12 months Customer account has following history: Sept. 1, 2010Customer activates $100 card Sept. 5, 2010$20 ATM withdrawal Sept. 6, 2010$20 ATM withdrawal Sept. 9, 2010$40 ATM withdrawal Dec. 14, 2010balance inquiry What fees may be assessed against this account and when? It’s A Whole New Card Game: Discussion Question # 9

12 The state of Entropy has a gift card law that prohibits all dormancy and inactivity fees and requires funds on gift cards escheat to the state after 3 years of inactivity. Acme sells gift cards in Entropy which provide for a $1/month fee after 1 year of inactivity. Customer buys a $50 Acme gift card in Entropy on Aug. 31, 2010 but never uses the card. What is the value of funds on the card on the following dates: Sept. 1, 2012 (2 years of inactivity) Sept. 1, 2013 (3 years of inactivity) Sept. 1, 2014 (4 years of inactivity) Sept. 1, 2015 (5 years of inactivity) It’s A Whole New Card Game: Discussion Question # 10