Overdrafts and prepaid accounts

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Question:

If we offer a prepaid account with overdraft coverage, can we activate the overdraft coverage when the account is opened?

Answer:

No. With certain very limited exceptions, you won’t be able to extend credit via a negative balance on a prepaid account,. You will be able to offer a linked credit feature to a prepaid account (making it a “hybrid prepaid-credit card”), but not until at least 30 days after the prepaid account has been registered, and consumer consent will be required before adding the credit feature.
Learn more about John Burnett’s webinar
Prepaid Accounts - New Rules