WASHINGTON (9/13/13)--Employers cannot mandate that their employees receive wages on payroll cards, and employees that do receive their wages on a payroll card are entitled to certain federal protections, Consumer Financial Protection Bureau Director Richard Cordray emphasized in a Thursday agency release.
The CFPB payroll card bulletin outlines federal consumer protections for payroll card recipients, including the right to fee disclosure, account history access and error resolution rights. Payroll card recipients also have limited liability for unauthorized use of their cards, the CFPB said.
The bulletin follows reports that employers in the retail, food service, and other industries have in some cases paid their workers solely through payroll cards. Some employees receiving wages on employer-sponsored payroll cards have complained of unexpected ATM, teller withdrawal and balance inquiry fees, the CFPB release added.
The bureau said it intends to use its enforcement authority to stop violations before they grow into systemic problems. The CFPB noted it will also maximize remediation to consumers and work to deter future payroll card violations, and will examine regulated entities that provide these cards to ensure they are in compliance with federal law.
For the full CFPB release, use the resource link.