It’s A Whole New Card Game:
New Federal Regulation of Debit,
Prepaid and Gift Cards
Discussion Questions
April 23, 2010
It’s A Whole New Card Game:
Discussion Question # 1
Are the following a “gift card,” “general-use
prepaid card” or neither for purposes of
12 CFR § 205.20?
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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
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It’s A Whole New Card Game:
Discussion Question # 2
Pine Tree National Bank wants to issue a
card which qualifies for a § 205.20(b)(2)
exclusion as not marketed as a gift card.
Which of the following are permissible
graphic designs for the card:
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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.”
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It’s A Whole New Card Game:
Discussion Question # 3
Which of the following are considered gift
cards for purposes of 12 CFR § 205.20?
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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
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It’s A Whole New Card Game:
Discussion Question # 4
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?
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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
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It’s A Whole New
Card Game:
Discussion
Question # 4a
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It’s A Whole New Card Game:
Discussion Question # 5
Retailer allows customers to purchase “online gift card”. Redemption code is e-mailed
to recipient and can be redeemed online.
Under Reg. E., the funds must remain
available for use for what period of time?
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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
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It’s A Whole New Card Game:
Discussion Question # 6
Retailer wishes to offer $25 gift card with $250
purchase. Card will have no fees but funds expire on
Dec. 31, 2010. Which of the following is permissible:
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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
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It’s A Whole New Card Game:
Discussion Question # 7
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?
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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
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It’s A Whole New Card Game:
Discussion Question # 8
Bank issues network branded non-reloadable gift
cards with certain usage fees. Which of the following
meets the fee disclosure requirements of Reg. E?
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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.
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It’s A Whole New Card Game:
Discussion Question # 9
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, 2010 Customer activates $100 card
 Sept. 5, 2010 $20 ATM withdrawal
 Sept. 6, 2010 $20 ATM withdrawal
 Sept. 9, 2010 $40 ATM withdrawal
 Dec. 14, 2010 balance inquiry
What fees may be assessed against this account and when?
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It’s A Whole New Card Game:
Discussion Question # 10
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:
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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)
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