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Tuesday, April 23, 2013

CFPB’s Determination of ME, TN Laws

The CFPB published a final determination as to whether certain laws of Maine and Tennessee relating to unclaimed gift cars are inconsistent with and preempted by the Electronic Fund Transfer Act (EFTA) and Regulation E.

Federal law generally prohibits the sale of a gift card that expires sooner than five years after the date when funds were last loaded onto the card. At the same time, unclaimed property laws in Maine and Tennessee consider some gift cards abandoned property as early as two years after purchase.

The CFPB has declared the provision in Tennessee’s unclaimed property law which deems some gift cards abandoned property as early as two years after purchase was inconsistent with EFTA and Regulation E and therefore was preempted.

However, Maine’s law which requires that gift cards be honored indefinitely, even if the card is considered abandoned property, was not declared preempted.

Read the final determination.

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