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NBPCA Continues to Raise Red Flags over N.Y. Payroll Card Proposal

Action-3flag-icon_red3On July 15, the NBPCA filed a comment letter with the New York Department of Labor in response to the N.Y. DOL’s revised proposed rule to regulate the methods and payment of wages, including the use of payroll cards, in the state. The NBPCA’s submission was the third comment letter it has filed with the N.Y. DOL in the last 12 months on the same or similar proposals, and the association still is concerned about the prospects that payroll cards could be regulated out of New York.

The NBPCA noted that while its members continue to have serious concerns with many facets of the revised proposal, they wished to highlight the provisions of the revised proposal that most threaten the continued viability of payroll cards in New York. Thus, the NBPCA’s comment letter particularly addressed a select number of significant concerns with the revised proposal, including: (i) the written notice and consent requirement that is impractical insofar as it invalidates valid consents previously obtained from existing employees already being paid by direct deposit or Payroll Card; (ii) employers do not have control over employees or ATM locations and therefore a requirement to provide employees with “local access” to one or more ATMs in “reasonable proximity” to the employee’s place of work or residence is infeasible; (iii) the fee restrictions remain onerous and overly burdensome and will likely make it uneconomical to offer Payroll Cards to New York workers; and (iv) the Revised Proposal remains inconsistent with Regulation E and will cause providers to incur substantial expense to maintain separate compliance programs for New York workers, which outweighs any perceived consumer benefit.

Further, the NBPCA expressed concern that, despite previously filing two detailed comment letters explaining the clear benefits payroll cards provide to New Yorker workers, the N.Y. DOL remains determined to differentiate payroll cards from other forms of wage payment and apply a more onerous regulatory scheme specifically designed to discourage the use of payroll cards. Finally, the NBPCA noted that the N.Y. DOL, through its proposed rule, is risking the continued availability of an extremely beneficial and consumer-friendly product that serves as a lifeline for New Yorker workers who are unable or unwilling to secure a bank account or who cannot afford the high costs of cashing their paychecks.

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