End of Comment Period Nears for Proposed Changes to Payroll Cards

On December 23, 2014, the Consumer Financial Protection Bureau (CFPB) issued a Notice of Proposed Rulemaking (NPRM) that seeks to regulate a number of prepaid products under Regulation E (a federal banking regulation), including payroll cards.  While payroll cards already are subject to Regulation E, the NPRM would impose a number of new requirements on financial institutions that issue payroll cards, including requiring proposed disclosure forms that (1) advise employees that they do not need to receive a payroll card; (2) focus solely on fees and (3) require extensive paperwork for credit features such as overdraft protection.  Employers that utilize payroll cards should consider providing comments to the CFPB to address concerns about potential overreach of the NPRM, need for clarification of specific terms, and any suggestion that payroll cards do not provide numerous employee benefits or cannot be used without incurring fees.  Comments are due to the CFPB by March 23, 2015.  Interested parties can locate the regulations at http://www.regulations.gov and search using key words “CFPB Prepaid Reg E”.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.