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The Consumer Financial Protection Bureau (CFPB), which is responsible for enforcing the Electronic Fund Transfer Act (EFTA) and related Regulation E, recently issued Bulletin 2013-10 explicitly prohibiting the mandatory use of payroll card accounts at an employer-selected financial institution and otherwise discussing the requirements for such use. Of note is the fact that the EFTA and Regulation E specifically preempt any state laws relating to EFTs, unless the state law affords more protection to the consumer. Further, the CFPB has clarified that these regulations apply to both employers and large depository institutions engaged in providing or utilizing payroll card accounts.

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