Are all types of prepaid cards covered under the requirements for CIP?
In order to determine if CIP requirements apply to purchasers of prepaid cards, the bank should first determine whether the issuance of a prepaid card establishes an “account”; and if so, determine the identity of the bank’s customer. Generally, prepaid cards that provide the cardholder with (1) the ability to reload funds or (2) access to credit or overdraft features should be treated as accounts, and the cardholder should be treated as the bank’s customer. For a more detailed summary of the new guidance, refer to Compliance Alliance’s summary for CIP for Prepaid Cards.
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