Fed Urged To Protect Payroll Card Recipients

SAN FRANCISCO – A coalition of consumer, labor and community reinvestment groups has written the Federal Reserve to ask that the regulator adopt some protections for workers who are paid with so-called payroll cards (See related story page 1). “Individuals are increasingly being asked to accept stored value cards to receive payments of funds which are essential for day to day family expenses,” the group wrote in its June 23 letter. “Consumer groups and organizations who work with employees, child support recipients, and others who are being offered these cards are deeply interested in ensuring that these cards offer the same level of consumer protections as those bank debit cards which are linked to individual consumer checking accounts.” The coalition includes Consumers Union, the Consumer Federation of America and the U.S. Public Interest Research Group. “We ask the Federal Reserve Board to issue an interpretation determining that all payroll card programs and similar stored value card programs – including card programs using a pooled account in which funds paid by, on behalf of, or for payment to, a number of individuals – qualify as a `consumer asset account’ under Regulation E,” the letter said.