More regulation for the payment card industry is on the way. On April 1, the FRB published amendments to Regulation E implementing the gift card provisions of the CARD Act, which become effective on August 22, 2010. The rule establishes requirements for both general use prepaid cards and store gift cards, as well as for gift certificates. Consistent with the CARD Act, the rule excludes certain products from the definitions of general-use prepaid card, store gift card and gift certificate, including, most importantly, reloadable cards that are not marketed as gift cards. An excluded product is not subject to the substantive restrictions regarding when a dormancy, inactivity or service fee may be imposed or the use of expiration dates. If an exclusion is not available, these restrictions apply. Specifically, the rule prohibits the imposition of a dormancy, inactivity or service fee in connection with a gift card or gift certificate, unless an issuer meets certain prescribed requirements, including the imposition of a fee only if there has been no activity for at least one year from the issuance, last reload, or use of the card or certificate. In addition, the rule provides that no person may sell or issue a general-use prepaid card, a store gift card, or a gift certificate with an expiration date, unless specific requirements are met, including a requirement that the underlying funds do not expire for at least five years. For additional information, please see our client alert at Images/100407GiftCard.pdf.