After the debacle of a McDonald’s employee filing suit of payroll cards in Pennsylvania, other states are now looking into payroll card programs being offering in their own states. The New York Attorney General is investigating complains about payroll cards and asking to see communications between employers and program managers.
Industry lawyers say bankers arenot particularly concerned about the New York investigation. The crackdown istargeting employers, though the Attorney General’s office has said it wants toreview “any and all communications” with their payroll card provideror financial institution.
It is unlikely that banks can remain immune from the ongoing battles around payroll cards. If enough regulation happens to affect the industry, banks may be reduced to offering payroll cards as a strategic product that helps them win and keep clients rather than as one that can generate revenue. Of course, some payroll programs are likely to be dropped all together, meaning that paper checks may still have a bright future.
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