Thread Options
|
#213936 - 07/21/04 07:22 PM
Forcing Employees to bank at your institution
|
Anonymous
Unregistered
|
Hi there,
I've got a good one. My bank is forcing employees to bank with them. I, as Compliance Officer, felt a duty to tell them that you can't force people to bank at the institution they work at. Employees are allowed to direct deposit their pay into any account they wish. I know, I've read commentary on this before and it escapes me. Does anyone know which reg this is mentioned in? Reg E??? Has anyone had to deal with this before? This is a hot issue here and I really don't want them misinforming new employees.
|
Return to Top
|
|
|
|
#213937 - 07/21/04 07:23 PM
Re: Forcing Employees to bank at your institution
|
10K Club
Joined: Sep 2002
Posts: 13,965
TN
|
Reg E states that you can't base someone's employment on whether or not they have an account at your institution. I had the HR Policy changed when I started here, but it hasn't been an issue.
_________________________
My Opinions Only
|
Return to Top
|
|
|
|
#213939 - 07/21/04 07:36 PM
Re: Forcing Employees to bank at your institution
|
Anonymous
Unregistered
|
That's a spin. Our bank seriously discourages employees and family members to have accounts here.
|
Return to Top
|
|
|
|
#213940 - 07/21/04 07:45 PM
Re: Forcing Employees to bank at your institution
|
Anonymous
Unregistered
|
Thanks for the site. That's exactly the one I was referring to. Boy, you all are so quick. Yes, they are trying to tell employees they HAVE to direct deposit here and only here. It's very frustrating and has become an emotional battle. Noone wants to hear that they technically can't force an employee.
|
Return to Top
|
|
|
|
#213941 - 07/21/04 08:53 PM
Re: Forcing Employees to bank at your institution
|
10K Club
Joined: Nov 2003
Posts: 12,846
|
Quote:
Our bank seriously discourages employees and family members to have accounts here.
why would you do that?
|
Return to Top
|
|
|
|
#213943 - 07/21/04 09:36 PM
Re: Forcing Employees to bank at your institution
|
Platinum Poster
Joined: Jun 2003
Posts: 938
Do you know the way to ...
|
If I remember correctly, you can require them to receive their pay through direct deposit, but you can't specify an institution where the account has to be held.
_________________________
Just a lowly 1st Year Law Student ("1L"), so don't take anything I say seriously!
|
Return to Top
|
|
|
|
#213944 - 07/21/04 09:50 PM
Re: Forcing Employees to bank at your institution
|
100 Club
Joined: Apr 2003
Posts: 180
Omaha, NE
|
I read the commentary a bit differently. Here it is:
An employer (including a financial institution) may not require its employees to receive their salary by direct deposit to any particular institution. An employer may require direct deposit of salary by electronic means if employees are allowed to choose the institution that will receive the direct deposit. lternatively, an employer may give employees the choice of having their salary deposited at a particular institution (designated by the employer) or receiving their salary by another means, such as by check or cash.
I read it to say you cannot require a specific institution to which their paycheck (or as the reg states an electronic fund transfer) will be directly deposited. If you pay in check anyway or give them the choice to receive their pay in cash or check, Reg E doesn't seem to prevent the requirement that they bank at your bank. This may be restricted by state law, but I don't see it specifically prevented in Reg E. Anyone see it my way?
_________________________
The opinions I express are my own and not the opinions of my employer.
|
Return to Top
|
|
|
|
#213945 - 07/21/04 09:55 PM
Re: Forcing Employees to bank at your institution
|
10K Club
Joined: Nov 2003
Posts: 12,846
|
Quote:
If you pay in check anyway or give them the choice to receive their pay in cash or check, Reg E doesn't seem to prevent the requirement that they bank at your bank. This may be restricted by state law, but I don't see it specifically prevented in Reg E. Anyone see it my way?
What, are you going to tell them that even though you pay them by check they HAVE to deposit it at your bank?
Let's define our terms here - I assume the discussion is about how employees are paid, because there is no legal or practical way you can tell employees that they cannot have an account at another institution.
|
Return to Top
|
|
|
|
#213946 - 07/21/04 10:06 PM
Re: Forcing Employees to bank at your institution
|
100 Club
Joined: Apr 2003
Posts: 180
Omaha, NE
|
Before I posted (and considered not posting), I considered that from a practical standpoint this would be impossible. I also considered it to be illegal from the standpoint of the freedom to contract. I wanted to see if others had the same thoughts.
_________________________
The opinions I express are my own and not the opinions of my employer.
|
Return to Top
|
|
|
|
#213947 - 07/21/04 10:19 PM
Re: Forcing Employees to bank at your institution
|
10K Club
Joined: Nov 2003
Posts: 12,846
|
Quote:
Before I posted (and considered not posting)...
I didn't mean to discourage posting; if I did so, I am sorry. I just couldn't figure out how your suggestion would work.
|
Return to Top
|
|
|
|
#213948 - 07/21/04 10:39 PM
Re: Forcing Employees to bank at your institution
|
100 Club
Joined: Apr 2003
Posts: 180
Omaha, NE
|
You did not, we are going through similar issues at the bank and wanted to post what I thought others might say if I were to state that we cannot force employees to bank here.
_________________________
The opinions I express are my own and not the opinions of my employer.
|
Return to Top
|
|
|
|
#213949 - 07/21/04 10:56 PM
Re: Forcing Employees to bank at your institution
|
Diamond Poster
Joined: Apr 2003
Posts: 1,636
snorkeling in warm, clear wate...
|
We have a policy that allows employees to bank wherever they wish - unless they work in Internal Audit - auditors are not allowed to have accounts here. My rule. I've seen too many fraud cases in 26 years and I like my audit staff a lot. I don't want anyone in the audit area to find a hole in the system and make a bad spur of the moment decision to exploit it rather than report it - if you don't have accounts at the bank, it makes it harder to exploit the holes. We also are in a large metro area with banks on every corner so it poses no hardship - the other benefit is that we get the marketing info and disclosures from the banks we use and get a first hand look at their systems. It's worked out well - no complaints. We can cash checks here, but that's it.
_________________________
CRCM|CAMS
|
Return to Top
|
|
|
|
#213950 - 07/22/04 01:55 PM
Re: Forcing Employees to bank at your institution
|
Power Poster
Joined: Nov 2000
Posts: 2,701
PA
|
Quote:
I read it to say you cannot require a specific institution to which their paycheck (or as the reg states an electronic fund transfer) will be directly deposited. If you pay in check anyway or give them the choice to receive their pay in cash or check, Reg E doesn't seem to prevent the requirement that they bank at your bank. This may be restricted by state law, but I don't see it specifically prevented in Reg E. Anyone see it my way?
Tom, I think what the commentary is saying is that an employer CAN offer direct deposit of an employee's pay to an account at a particular institution (and only that institution) as long as the employer also offers the employee the option of receiving his/her pay via check, cash, etc. So, in other words, if all employees must take their pay via direct deposit, you must give them a choice of financial institutions in which to have it deposited. If you give them a choice of either direct deposit or some other means to receive their pay, you can require a particular FI if they choose direct deposit.
_________________________
Opinions expressed are mine and not necessarily those of my employer.
|
Return to Top
|
|
|
|
#213952 - 07/23/04 03:01 PM
Re: Forcing Employees to bank at your institution
|
Anonymous
Unregistered
|
After meeting with upper management yesterday, that's exactly what they decided to do. They decided they would direct deposit only into an account with them, or give the employee the option of getting cash and only cash. I'm kind of disappointed in this tactic because it just doesn't seem reasonable. I'm of the mind set that everyone has the right to bank where they wish and they are making it inconvienent to bank elsewhere. Oh well, I guess I'll have to live with this one. I just don't think it's a big deal to have employees bank with other institutions if they wish.
|
Return to Top
|
|
|
|
#213956 - 07/23/04 06:12 PM
Re: Forcing Employees to bank at your institution
|
Anonymous
Unregistered
|
That's exactly what I'm doing. My bank doesn't offer online bill pay and I absolutely love my online bill paying feature. Wouldn't trade it for the world. Thanks for all your help.
|
Return to Top
|
|
|
|
#213957 - 07/23/04 07:09 PM
Re: Forcing Employees to bank at your institution
|
Power Poster
Joined: Apr 2001
Posts: 4,828
Between the lines
|
Just my 2ยข ---- sounds like a knee-jerk reaction to me. Do they think that they are going to stop undesirable employees from doing things that they should not do, like maybe kiting. Whatever the reason, if they are trying to control behavior with this rule, I vote that they deal with the problem employee(s) instead.
If you are doing direct deposit, it's just as easy to go to another bank as it is to go to your own.
_________________________
NOLA is my Beach!
|
Return to Top
|
|
|
|
#213958 - 07/23/04 07:47 PM
Re: Forcing Employees to bank at your institution
|
Anonymous
Unregistered
|
When I read the requirements I believe it to be that they can require the direct deposit be in thier institution if they give you the option of receiving your check by cash or check. I think they have to give you an option of cash or check. They think they can just say we'll give you cash. I think this is so unreasonable.
|
Return to Top
|
|
|
|
#213959 - 07/23/04 08:05 PM
Re: Forcing Employees to bank at your institution
|
10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
|
They can require direct deposit to a specific bank (their own in this case) if they offer either payment by check or payment in cash. They don't have to offer both.
The intent of the rule is to prevent an employer from requiring EFT direct deposit to a specific bank as a condition of employment.
_________________________
John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
|
Return to Top
|
|
|
|
#213960 - 07/23/04 11:36 PM
Re: Forcing Employees to bank at your institution
|
Anonymous
Unregistered
|
Would this bank want it known that a significant number of its employees are being paid regularly in cash? Wouldn't this constitute an employee safety issue? What would the potential liability be?
|
Return to Top
|
|
|
|
|
|