Payroll Cards: Navigating the Changing Regulatory Landscape
By KEVIN PETRASIC & CATHY BEYDA
Recent regulatory initiatives impacting payroll cards relate to limits on interchange fees, overdraft protection, and customer identification programs. Non-bank participants in such programs may be required to register with FinCEN as providers of "prepaid access" and maintain effective anti-money laundering and recordkeeping protocols. Other compliance considerations relate to state regulation, which generally recognizes payroll cards as valid for wage payments, but only if certain conditions are met. Kevin Petrasic and Cathy Beyda discuss the benefits of such programs and the evolution of regulation in response to their rapid growth.