The CFPB has published a bulletin expressing its view that employers cannot require their employees to receive wages on a payroll card. The bulletin also gives the CFPB’s view on some of the federal consumer protections that apply to payroll cards, such as fee disclosure, access to account history, limited liability for unauthorized use, and error resolution rights.
With some limited exceptions, the CFPB has authority to enforce the Electronic Funds Transfer Act and Regulation E against anyone who violates them, including employers and the financial institutions that issue payroll cards. The Bureau intends to use its enforcement authority to stop violations before they grow into systemic problems, maximize remediation to consumers, and deter future violations. The Bureau also has supervisory authority over larger depository institutions engaged in, among other things, providing payroll cards. The Bureau stated it will be looking to ensure that entities comply with federal consumer financial laws.