If a consumer purchases a prepaid reloadable debit card from us and subsequently provides their card information to their employer so that said employer can direct deposit the consumers payroll onto the prepaid card.......are we subject to the Reg E requirements for Payroll Cards? I guess my question is what determines whether a card is considered a payroll card for purposes of Reg E? If the card is not sold as a payroll card but is subsequently used for recurring payroll direct deposits does that turn it into a payroll card?

Does anyone have any opinions or guidance on the above question? Any feedback would be greatly appreciated.

The key question, I think, is whether the card is "directly or indirectly established by an employer." That's a prerequisite of a payroll card account. I don't think that when the holder of your reloadable prepaid debit card arranges to piggyback on your card a direct deposit of his payroll payments, there is anything to say that the employer has established the card account. I would come to a different conclusion, perhaps, if you said that the bank worked with the employer to arrange for payroll direct deposits to your card. Does your bank simply allow direct deposit to these cards in addition to the normal reloading of funds that might be arranged at the bank?

Thank you for the feedback. The card would not be established by the employer. It sounds like we should use caution in marketing these to ensure that they are not marketed as a means to receive payroll. I just don't want to cross the line and move from being a reloadable debit card to what the examiners would consider a payroll card.

Again, thanks for the feedback.

Can't you control how funds are reloaded on the cards?

Having payroll direct deposited to a general purpose reloadable card, does not make the card a payroll card. John is correct that the card program must be sponsored by an employer.

With that said, now that Federal Payments to prepaid cards have been granted the same protections as payroll cards for Reg E, your GPR cards may become covered.

You won't find this info in Reg E. It is an ACH rule change from Treasury that has now been in effect for over a year.