After the debacle of a McDonald’s employee filing suit ofpayroll cards in Pennsylvania, other states are now looking into payroll cardprograms being offering in their own states. The New York Attorney General isinvestigating complains about payroll cards and asking to see communicationsbetween 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 ongoingbattles around payroll cards. If enough regulation happens to affect theindustry, banks may be reduced to offering payroll cards as a strategic productthat helps them win and keep clients rather than as one that can generaterevenue. Of course, some payroll programs are likely to be dropped alltogether, meaning that paper checks maystill have a bright future.
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