In the wake of recent scrutiny of consumer advocates, class action lawyers, and state regulators (discussed in our July 4 post), the CFPB issued, on September 12, a bulletin reiterating the applicability of the Electronic Fund Transfer Act (EFTA) and Regulation E to payroll card accounts. Outlining some of the protections afforded to consumers who receive wages on a payroll card, the bulletin notes that under Regulation E, "an employer may not require that its employees receive their wages by electronic transfer to a payroll card account at a particular institution." The bulletin acknowledges state law "restrictions on the manner in which employers may make wages available to employees." While noting that the EFTA and Regulation E preempt state law relating to electronic fund transfers to the extent of any inconsistency between state law and the EFTA/Regulation E, the bulletin reiterates that a state law is not considered inconsistent with the EFTA/Regulation E when it provides consumers greater protections than afforded by the EFTA/Regulation E.
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